Production of Electronic Goods in India Elevated by 75% Between 2016-17 and 2020-21, While Their Exports Rose by 104%

Production of Electronic Goods in India

Even though the government has implemented various production linked incentive (PLI) schemes to promote and incentivise local manufacturing of electronic goods and IT hardware since April 2020, there has been robust growth in both production and exports of these products over the last five years.

According to official figures from the Ministry of Electronics and Information Technology, the export of electronic goods increased by 104 percent between 2016-17 and 2020-21. During the same period, the manufacturing of these goods increased by 74.7 percent.

In 2016-17, India exported electronic goods worth INR 39,980 crore, which is expected to rise by 104 percent to INR 81,948 crore in 2020-21. Similarly, in 2016-17, India produced electronic products worth INR 3,17,331 crore, which increased by 74.4 percent to INR 5,54,461 crore in 2020-21.

On April 1, 2020, just days after imposing a nationwide lockdown to combat Coronavirus-related infections, the government announced a PLI scheme for large-scale electronics manufacturing. This scheme provides 6 percent to 4 percent to eligible companies on incremental sales (over the base year) of goods in targeted segments such as mobile phones and specified electronic components manufactured in India for five years following the base year, which is 2019-20.

Similarly, the government launched another PLI scheme for IT hardware on March 3, 2021, with 4 percent, 2 percent, and 1 percent incentives given to eligible companies on incremental net sales over the base year, which is 2019-20.

This incentive is provided for four years to produce goods in targeted segments such as personal computers, laptops, tablets, and servers. This scheme has so far approved 14 companies.

These initiatives were launched as part of the government's Atma Nirbhar Bharat policy, aiming to make India a significant design and manufacturing hub for electronic goods. Other programmes that encourage local manufacturing of electronic components include the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and the Modified Special Incentive Package Scheme (MSIPS).

The National Policy on Electronics seeks to position India as a global hub for Electronics System Design and Manufacturing (ESDM) by encouraging and driving capability development and creating an enabling environment for the industry to compete globally.

Four schemes have been introduced to boost the electronics sector and establish the necessary ecosystem, namely the Production Linked Incentive Scheme (PLI) for Large Scale Electronics Manufacturing, the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), the Modified Electronics Manufacturing Clusters Scheme (EMC 2.0), and the Production Linked Incentive Scheme (PLI) for IT Hardware.

The government also claims that exporters are receiving assistance through various exporter-oriented schemes. Efforts are being made to reduce the burden of compliance through rationalisation and decriminalisation, and several initiatives are being launched to improve the ease of doing business.

As per the government, an IT-based platform for licencing exporters and resolving their complaints is underway. The government is also working to improve the value of Indian export branding to improve India's global standing as a reliable supplier, and proactive steps are being taken to align the country with the global value chain.

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